Archive for June, 2014

When will making the first offer help your negotiations, and when will it hurt?

Recognizing the Chicago Bulls managing partnerâs reputation as a ruthless negotiator, in 1996 Michael Jordanâs agent made a decision to âtake the Bulls by the hornsâ and table an audacious $52 million salary request. The parties settled at $33.14 million, a record that remains the single highest annual salary in NBA history. For Jordan and his agent, making the opening offer was a strategy that clearly paid dividends.

By way of contrast when the sportswear manufacturer Lacoste adopted a similar strategy in their negotiations with tennis star Andy Roddick the result was disastrous. They tabled an opening offer which included a clause reducing the value of the contract by 75 per cent if Roddick were to fall below 15th in the world rankings. Unbeknownst to Lacoste, Roddick had already made the decision to retire if he fell in the world standings and so Roddickâs agent âreluctantly agreedâ to Lacosteâs terms in return for a larger annual guaranteed sum. In this example submitting the first offer did nothing to help the Lacoste bottom line.

Share Your Thoughts

Help us help others by leaving your comments, insights, and reviews on Amazon.com. This demonstration of âsocial proofâ will benefit all.
Click below to read and leave current reviews on Amazon.com for: